The slowdown in trend productivity growth, which began a decade ago, is principally due to two structural factors; the fading boost from the IT revolution and the aging of the population. The financial crisis may have triggered a temporary decline in productivity, as credit constraints limited innovation and investment and the resulting recession led to some labour and capital hoarding. But productivity growth has remained weak in the last couple of years, even as investment and the utilisation rates for labour and capital have returned to normal.
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